The rise of home food delivery today seems obvious to anyone with one eye open. Instacart, UberGrocery, Walmart, Costco, as well as options from other retailers and retail agnostic delivery companies are everywhere. It seems like such a novel idea to anyone under the age of 40. But nearly a century ago, horse and buggy (followed by electric then gas trucks) used to deliver everything from milk and eggs to bread and meat directly to your door. Take a look at an house that’s just old enough, and the side of that house may have a cubby door accessible from the outside and inside in which the milkman could leave the goods.
Fashion isn’t the only thing that’s cyclical.
Consider cord cutting. Over a decade ago, the rise of the internet made it very easy for anyone with some basic computer skills to source and download a movie, television show or music on the internet and download it for free. It wasn’t perfect, and you needed some technical know how to torrent movies or download through sharing platforms like napster or limewire. You also ran the risk of downloading viruses along with the shows and movies that could destroy your computer and cost you all your saved files. But it was worth the effort because it was so much cheaper.
Then along came Netflix, with its the revolutionary streaming platform, and Apple with iTunes, and everything changed. It required faster internet and larger bandwidth to be commonplace in the industry but since that became a reality, the viewer could now have all of their favorite shows and music for just $10 per month at Netflix. And because up to 4 users could access one account, that cost was closer to $2.50 per person (or, more realistically, $10 for one person and free for the other three people). With that, the need to download movies, tv shows and music and the hassles and risks that came with the illegal activity dropped precipitously. In the UK, BBC reported piracy dropped from 18% of the population to 10% between 2013 and 2018. In Australia, a study by the Department of Communications shows a drop across all categories (Movies, Music, TV, Video Games) from 43% to 37% from 2015 to 2016. It was like prohibition ending — why risk breaking the law when you could get your favourite spirit for a few dollars? With all of the high demand shows and movies in one place, at a fair price, and so easy to use, people no longer needed the pricey cable deals and the cord cutting began.
But, the major companies that created and own the content off of which Netflix was getting rich took notice. One by one, shows and movies are starting to move off the Netflix platform and onto the media giants’ own offering. NBC launched Peacock, Disney launched Disney+, Amazon now has Prime Video. This simultaneous squeeze on Netflix means it has less content and more competition. It also puts a squeeze on consumers’ wallets.
Music too now has multiple offerings. iTunes originally provided one simple place to get the music one wanted, with the same value proposition as Netflix. But not there is Apple Music, Spotify, Tidal, among others, to add to Hulu, Netflix, CraveTV, HBO, DAZN, Youtube. Even Apple has moved into the realm of content creation to offer movies and shows as an Apple benefit.
So a consumer who wants to watch multiple shows now has to subscribe to multiple streaming services as all content is no longer in one place. The cost of just a few of these services is ultimately the same price or more than the cable subscription. This expensive and inefficient not to mention time consuming and onerous process will force consumers to look for alternatives. One alternative is to return to pirating, although internet security has improved and that is much more difficult than ten year ago. Another option is that we as consumers will likely be offered is one location to access most of these new streaming services. For one bundled price per month you can have access to all of your favorite tv shows, music and movies. Basically, Cable 2.0.
Consumers liked home delivery before they liked supermarkets, and now it’s returned to home delivery. So too may consumers return to a cable or bundled type of service after leaving cable for streaming services.
Giovanni
